Sunday, October 28, 2007

KUALA LUMPUR (STS, 24/10/2007): Malaysia will pay US$87 million (S$127 million) in compensation to a developer over last year's cancellation of a controversial 'crooked bridge' to Singapore, a finance ministry official said on Wednesday.

After years of bitter negotiations, Malaysia ditched plans to build the bridge to replace an ageing causeway linking its southern Johor state with Singapore in April 2006.

It said the city-state's demands for air space access and sand for reclamation projects in return for its agreement were unacceptable.

Developer Gerbang Perdana will be paid RM237.5 million for the abrupt axing of the project and US$55 million ringgit for work already done, a finance ministry official told reporters.

'We have yet to decide on when exactly the payment for the compensation will be made but we will announce full details of the plan very soon,' said the official, who declined to be named.

He said that finance ministry parliamentary secretary Hilmi Yahya told parliament on Wednesday that the ministry and Gerbang Perdana had reached an amicable agreement over the project, initially valued at RM1.113 billion.

Construction of the bridge has been among a number of unresolved bilateral issues that Singapore and Malaysia have squabbled over for years.

Malaysia had threatened to proceed with building its half of the bridge - an unusual construction that came to be known as the 'crooked bridge' - but Prime Minister Abdullah Ahmad Badawi eventually backed down.

Former prime minister Mahathir Mohamad, who launched the bridge initiative in 1996 during his tenure, was infuriated by the move and accused his successor of caving in to Singapore.